Pros and Cons Of Using A Credit Card


When it comes to owning different kinds of debts to fund various needs and goals in your life, personal loans, and online credit cards are the costliest ones. However, if you manage them well, there may not be any issues like landing in financial soup.

Coming to online credit cards, it is also a convenient method or financial product to manage your finances, needs and do more. If you are deciding whether opting for a credit card is a good thing or not, here’s providing you some advantages and disadvantages of the same.

Credit cards Advantages First!


  • Credit cards are Safer Than Cash


There’s only a remote chance of getting your lost, or missed cash returned; you can easily cancel your online credit card in case you lose the wallet. Leading financial companies have security processes in place to protect your card from getting misused. You need to contact customer care of your bank to get things done quickly.


  • Credit Cards Can Build the Credit Rating


Did you know that your best credit card account details and payment history can make up a portion of your credit history? If you keep your account in good condition, it can help you build the credit score easily which could increase your chances of availing a lower interest-rate loan in future.


  • Credit cards offer an Emergency Line of Credit


Online credit cards can offer you a financial safety if you have a shortage of funds or savings to cover any emergency or unexpected need. Although you will need to repay all, at least you will have financial stability when required in time.

Now the Disadvantages of Credit Cards!


  • You will Have to Pay a Higher Rate of Interest


Carrying a balance on your online credit card from month-to-month will mean paying interest charges as well. The interest rate on credit card purchases could be as high as 15-20% which means you will end up paying much more than expected.


  • Credit Damage


While maintaining a good credit card repayment history can help you build a credit history for availing a future loan on a lower rate, missed EMI payments can also wreak havoc. Missed credit card repayments and running debts get recorded on your credit profile and could easily affect your chances of availing a loan in future. Thus, one needs to be very prudent with credit card repayments especially if you have a loan to apply in future.


  • Credit Card Frauds


You should know that there are many fraud schemes directed towards credit cards. Although you may be compensated for an illegal transaction of credit card, it would be a stressful and time-consuming experience.

The Bottom Line

Modern finances have provided today’s consumers with many financial benefits, and one of them is online credit cards for sure. Credit cards could come to your rescue to cover your needs when needed if you use them smartly and repay the dues on time.

Aman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management.

Leave a Reply

Your email address will not be published. Required fields are marked *